Maurice Tutor

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    Argosy University/ Phoniex University/
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Category > Accounting Posted 23 Jul 2017 My Price 99.00

Leander Mfg

(Step method) Leander Mfg. has three support departments (human resources, administration, and maintenance) and two revenue-generating departments (assembly and finishing). The company uses the step method to allocate support department costs to operating departments. In October 2010, human resources incurred $360,000 of costs, administration incurred $558,000, and maintenance incurred $170,000.Proportions of services provided to other departments for October 2010 follow.

 

Human Resources

Administration

Maintenance

Human resources

  

10%

5%

Administration

10%

  

15

Maintenance

15

10

  

Assembly

40

50

45

Finishing

35

30

35

a. Assuming that the departments are listed in a benefits-provided ranking, what amount of cost should be assigned from human resources to each of the other departments? From administration? From maintenance?

b. What total support department cost was assigned to assembly in October? To finishing?

c. Explain why the cost allocation is affected by the order in which costs are assigned.

Answers

Maurice Tutor
(5)
Status NEW Posted 23 Jul 2017 09:07 PM My Price 99.00

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